Northbound (Hong Kong-domiciled funds) distributed via the Hong Kong-China Mutual Recognition of Funds (MRF) scheme had net redemptions of RMB 258.8m ($36.6m) in May, according to the latest data from China’s State Administration of Foreign Exchange (Safe).
The outflows come after the funds gained momentum in April, attracting RMB 2.28bn during the month.
Northbound fund flows
| Monthly net flows in RMB | Total net inflows in RMB* since the scheme started | |
| Jan-20 | (407.1m) | 15.78bn |
| Feb-20 | 1.03bn | 16.8bn |
| Mar-20 | (1.53bn) | 15.3bn |
| Apr-20 | 2.28bn | 17.6bn |
| May-20 | (258.8m) | 17.3bn |
| YTD net flows: RMB 1.11bn | ||
| 2019 total net inflows: 7.16bn | ||
Source: Safe. *Figure at the end of the month
Year-to-date, Northbound funds attracted RMB 1.11bn, according to data from Safe.
Since the MRF began in 2015, 23 northbound products from 12 firms have been approved by China’s regulator, according to records from the China Securities Regulatory Commission.
This year, CSRC approved six funds under the MRF scheme, which include products managed by Amundi, JP Morgan Asset Management, Pictet Asset Management and HSBC Global Asset Management.
Seven more funds are still awaiting regulatory approval, which includes products managed by China Asset Management, Fidelity, Taikang Asset Management Hong Kong, E Fund Management and Income Partners, CSRC records show.
Southbound funds
On the flipside, investors in Hong Kong have poured money into southbound funds (China-domiciled products sold in Hong Kong) for the third consecutive month. However, the momentum seems to be slowing down, as monthly inflows for May were just at RMB 530,000, which compares with the combined net inflows of nearly RMB 20m in March and April.
Year-to-date, net flows totalled RMB 62.43m.
Southbound fund flows
| Monthly net flows in RMB | Total net inflows in RMB* since the scheme started | |
| Jan-20 | 63.69m | 328.86m |
| Feb-20 | (21.18m) | 307.68m |
| Mar-20 | 16.51m | 324.19m |
| Apr-20 | 2.88m | 327.07m |
| May-20 | 530,000 | 327.60m |
| YTD net flows: 62.43m | ||
| 2019 total net outflows: 168.43m | ||
Source: Safe. *Figure at the end of the month
In total, Hong Kong’s Securities and Futures Commission has approved around 50 China-domiciled funds to be sold in Hong Kong via the MRF, but only two dozen funds have been made available to investors, SFC records show.
Since the MRF scheme began in 2015, southbound funds attracted RMB 327.6m from investors. Northbound funds, meanwhile, had seen more traction, attracting RMB 17.3bn since 2015.
